Cerner (NasdaqGS:CERN) - Share price, News & Analysis

CERN fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	0/6
Financial Health	5/6
Dividends	2/6

CERN Stock Overview

Cerner Corporation, together with its subsidiaries, provides health care information technology solutions and tech-enabled services in the United States and internationally.

Rewards

Trading at 36.8% below our estimate of its fair value

Earnings are forecast to grow 16.97% per year

Risk Analysis

Large one-off items impacting financial results

Profit margins (10.2%) are lower than last year (14.7%)

Significant insider selling over the past 3 months

Cerner Competitors

Veeva Systems

NYSE:VEEV

US$25.0b

Change Healthcare

NasdaqGS:CHNG

US$7.2b

Doximity

NYSE:DOCS

US$6.6b

Teladoc Health

NYSE:TDOC

US$5.1b

Price History & Performance

Summary of all time highs, changes and price drops for Cerner
Historical stock prices
Current Share Price	US$94.59
52 Week High	US$94.74
52 Week Low	US$69.08
Beta	0.76
1 Month Change	0.83%
3 Month Change	1.59%
1 Year Change	19.69%
3 Year Change	36.24%
5 Year Change	44.74%
Change since IPO	46,467.61%

Recent News & Updates

May 13

Cerner: A Great Buy Today?

Oracle is planning to purchase Cerner and has begun the regulatory process in the UK - after having reached the expiration of the waiting period in U.S. Cerner recently reported an EPS beat and a revenue miss. Given all of these moving parts, the question is always this: is Cerner a buy, sell, or hold? This article describes a valuation approach to portfolio-building, reviews the factors affecting Cerner at the moment, and offers a valuation estimate to aid buy, hold, sell decision-making.

Shareholder Returns

	CERN	US Healthcare Services	US Market
7D	0.7%	4.0%	1.0%
1Y	19.7%	-40.3%	-15.1%

Return vs Industry: CERN exceeded the US Healthcare Services industry which returned -40.1% over the past year.

Return vs Market: CERN exceeded the US Market which returned -13.2% over the past year.

Price Volatility

Is CERN's price volatile compared to industry and market?
CERN volatility
CERN Average Weekly Movement	0.4%
Healthcare Services Industry Average Movement	12.5%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: CERN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 0% a week.

Volatility Over Time: CERN's weekly volatility (0%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1979	25,150	David Feinberg	https://www.cerner.com

Cerner Corporation, together with its subsidiaries, provides health care information technology solutions and tech-enabled services in the United States and internationally. It offers Cerner Millennium architecture, a person-centric computing framework, which includes clinical, financial, and management information systems that allow providers to access an individual’s electronic health record (EHR) at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers. The company also provides HealtheIntent platform, a cloud-based platform to aggregate, transform, and reconcile data across the continuum of care; and CareAware, an EHR agnostic platform that facilitates connectivity of health care devices to EHRs.

Cerner Fundamentals Summary

How do Cerner's earnings and revenue compare to its market cap?
CERN fundamental statistics
Market Cap	US$27.82b
Earnings (TTM)	US$589.47m
Revenue (TTM)	US$5.81b

47.2x

P/E Ratio

4.8x

P/S Ratio

Is CERN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CERN income statement (TTM)
Revenue	US$5.81b
Cost of Revenue	US$1.01b
Gross Profit	US$4.79b
Other Expenses	US$4.20b
Earnings	US$589.47m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.00
Gross Margin	82.53%
Net Profit Margin	10.15%
Debt/Equity Ratio	41.3%

How did CERN perform over the long term?

See historical performance and comparison

Dividends

1.1%

Current Dividend Yield

49%

Payout Ratio

Valuation

Is Cerner undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

36.8%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: CERN ($94.59) is trading below our estimate of fair value ($149.6)

Significantly Below Fair Value: CERN is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: CERN is poor value based on its Price-To-Earnings Ratio (47.2x) compared to the US Healthcare Services industry average (46.5x).

PE vs Market: CERN is poor value based on its Price-To-Earnings Ratio (47.2x) compared to the US market (14.9x).

Price to Earnings Growth Ratio

PEG Ratio: CERN is poor value based on its PEG Ratio (2.8x)

Price to Book Ratio

PB vs Industry: CERN is overvalued based on its Price-To-Book Ratio (7.1x) compared to the US Healthcare Services industry average (2x).

Future Growth

How is Cerner forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

17.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CERN's forecast earnings growth (17% per year) is above the savings rate (1.9%).

Earnings vs Market: CERN's earnings (17% per year) are forecast to grow faster than the US market (12.1% per year).

High Growth Earnings: CERN's earnings are forecast to grow, but not significantly.

Revenue vs Market: CERN's revenue (5.8% per year) is forecast to grow slower than the US market (7.7% per year).

High Growth Revenue: CERN's revenue (5.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CERN's Return on Equity is forecast to be high in 3 years time (39.2%)

Past Performance

How has Cerner performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-4.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CERN has a large one-off loss of $379.7M impacting its March 31 2022 financial results.

Growing Profit Margin: CERN's current net profit margins (10.2%) are lower than last year (14.7%).

Past Earnings Growth Analysis

Earnings Trend: CERN's earnings have declined by 4.3% per year over the past 5 years.

Accelerating Growth: CERN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: CERN had negative earnings growth (-26.8%) over the past year, making it difficult to compare to the Healthcare Services industry average (9.5%).

Return on Equity

High ROE: CERN's Return on Equity (15.1%) is considered low.

Financial Health

How is Cerner's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CERN's short term assets ($2.5B) exceed its short term liabilities ($1.4B).

Long Term Liabilities: CERN's short term assets ($2.5B) exceed its long term liabilities ($2.1B).

Debt to Equity History and Analysis

Debt Level: CERN's net debt to equity ratio (18.7%) is considered satisfactory.

Reducing Debt: CERN's debt to equity ratio has increased from 12.2% to 41.3% over the past 5 years.

Debt Coverage: CERN's debt is well covered by operating cash flow (105.2%).

Interest Coverage: CERN's interest payments on its debt are well covered by EBIT (64.1x coverage).

Balance Sheet

Dividend

What is Cerner current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.14%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CERN's dividend (1.14%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: CERN's dividend (1.14%) is low compared to the top 25% of dividend payers in the US market (4.06%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, CERN has been paying a dividend for less than 10 years.

Growing Dividend: CERN's dividend payments have increased, but the company has only paid a dividend for 3 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (49.2%), CERN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (28%), CERN's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure

CEO

David Feinberg (59 yo)

0.58

Tenure

US$21,177,023

Compensation

Dr. David Todd Feinberg, M.D., MBA, has been Independent Director at Humana Inc. from March 2022. He serves as President, Chief Executive Officer, Managing Director and Director at Cerner Corporation since...

CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD21.18M) is above average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: Insufficient data to compare David's compensation with company performance.

Leadership Team

Experienced Management: CERN's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.

Board Members

Experienced Board: CERN's board of directors are considered experienced (3.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CERN insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/25 00:00
End of Day Share Price	2022/05/25 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31